Gas is attracting a lot of attention on the European energy market due to the problems with Russia. But the electricity market is also very upset. The EPEX Spot started its way up again last week. This is partly due to the weather conditions that are not optimal for the production of green electricity. Expensive conventional fuels also benefit.
The electricity market continues to move upwards. On Friday, July 8, the quotation on the EPEX Spot rose to €312,06 per MWh. Over the weekend, the price showed a dip. However, the lowest point was not on Sunday as usual, but on Saturday with a quotation at €182,15 per MWh. Yesterday (Monday 11 July) the price on the EPEX Spot shot up again to €363,96 per MWh. That is the highest reading since March 9.
According to several analysts, a lack of wind is an important cause of the high electricity price. In addition, of course, coal and emission rights are well priced and gas is even very expensive. In the afternoon, the electricity price is still somewhat depressed by the supply of solar energy.
Dominance
Solar panels play an important role in making the energy supply more sustainable. The International Energy Agency (IEA) warns that the production of solar panels is too concentrated in one country. Production capacity disappears from Europe, the US and Japan and disappears to China. According to the IEA, China has pursued a focused and successful industrial policy for the capture and conversion of solar energy (solar PV) for the past decade. As a result, production costs fell by approximately 80% in that period. China has become the market leader through active policies and it looks like it will account for 2025% of the world's production of certain essential components for solar panels by 95. According to the IEA, such a dominant position of one country is a major risk in every chain, and solar panels are no exception. Diversification of the chain is therefore urgently needed and targeted government policy is necessary.
Financial problems
Due to the extreme price movements in the energy and electricity markets, France is forced to renationalise energy company EDF. The French government hinted at that last week. The company operates the largest fleet of nuclear reactors in Europe. Due to technical problems, the electricity production of the nuclear power plants has fallen sharply and due to the legislation, the electricity that is still produced must be marketed at a reduced rate. As a result, EDF has run into financial difficulties.
In Scandinavia there are concerns about electricity production from dams. Norway generates about 90% of its electricity from hydropower and a significant part of it is exported to mainland Europe. However, the reservoirs of various dams are only 59% full. The median for this period is 68%. In the south-west of the country, a third of the reservoirs have fallen to the lowest level in twenty years. If there is a dry summer, there is a chance that the lakes are insufficiently filled for the coming winter. Various operators have therefore significantly reduced production in order to be able to produce sufficient power even in a dry year.